How Investors Bank Will Grow, Serving Underserved

may 2012

The Insider’s Monthly Guide to New York’s Q&A: Commercial The M.O. chats with Mortgage Mission Capital Advisor’s Jordan Ray Industry

Despite Q4 drop in distress, Schechtman, Knakal and others rack up note sale deals

Power Profile: Kevin Cummings How Investors Bank Will Grow, Serving Underserved

Savills USA CEO Stein’s Law: Michael Stoler John Lyons Talks Pitfalls to Avoid for Takes an In-Depth Look at Capstone’s Recap of Cross- Border Investment Loan Guarantors Construction Financing Iconic 14 Wall Street

TMO.0512.Cover.FINAL.indd 1 4/19/12 5:33 PM Relationship Driven. Execution Focused. Recent Financing Highlights

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ADpage.indd 30 4/19/12 11:35:00 AM Cover Photo by Daniel M. Weiss May 2012 / Contents

321 West 44th Street, New York, NY 10036 212.755.2400

Carl Gaines 22 Editor will o’hare will Jotham Sederstrom Editorial Director

Dan Geiger Daniel Edward Rosen Staff Writers

Michael Stoler Contributor

Sam Chandan Joshua Stein 29 4 Columnists Barbara Ginsburg Shapiro Associate Publisher

Editor’s Letter 02 Robyn Weiss Director of Real Estate

Peter Lettre News Exchange 04 Power Profile 20 Photo Editor Mortgage originations, note sales, Kevin Cummings: Investors Bank’s Plan For Growth investments, industry research by Ian Thomas Dean Quigley  Cross-Border Investment Goes Global Art Director  At Over $60 Billion, Wells Fargo Again on Top Mark Stinson  Ironstate Development Inks $33M Loan Duly Noted 24 Production Manager, Designer  1 West Street Condo Refis Despite Q4 2011 drop in distress, Schechtman, Knakal Lauren Draper  Mission Markets Note and others rack up hundreds of millions of dollars in deals Designer  Build NYC Program Clears $90M Financing by Carl Gaines Lisa Medchill Advertising Production In-Depth Look 12 Q&A 28 A comprehensive take on CRE finance trends Jordan Ray | Mission Capital Advisors by Michael Stoler by Ian Thomas OBSERVER MEDIA GROUP Jared Kushner Publisher Scheme of Things 14 The Sked: May 31 Christopher Barnes Monthly charts of commerical real estate Our picks for the month’s must-attend events President financings in the five boroughs Barry Lewis Executive Vice President Jamie Forrest Stein’s Law 16 Of Interest 32 Associate Publisher, Senior Vice President Better Luck Next Time An index of all the people, places addresses Ken Newman Joshua Stein and companies mentioned in this issue Classified Advertising Director Sydney Sarachan Audience Development Manager The Basis Point 16 Mark Pasquerella A Disappointing First Quater for CMBS Controller Sam Chandan Kratos Vos V.P. circulation Laurence Rabinowitz Workforce 18 General Counsel Hirings, promotions, defections Arthur L. Carter Founder & Editorial Director and appointments

TMO.0512.ContentsCS3.indd 1 4/19/12 5:20:27 PM Editor’s Letter / May 2012

Distressed... But opportunities still abound.

You’ll see a few changes in this month’s a Ukrainian billionaire thrown in for added issue of The Mortgage Observer. We wanted intrigue. Also in the News Exchange section a simpler, easier-to-read design while still is a look at cross-border investment, which sticking to our mandate to bring readers the we looked at last month. This time around, most current information about the tristate though, we studied, thanks to Savills, invest- area’s commercial mortgage market. ments between any two countries, not nec- This month writer Ian Thomas caught up essarily involving the United States. Savills with Investors Bank’s Kevin Cummings to charted a staggering volume of capital mov- find out the bank’s plans for increasing its ing between countries, and some surprising lending in the area. investors rising to the front to send their And I delved into the ongoing phenom- capital to far away places. enon of distressed note sales. Despite last Lastly, our charts are back, drawn on data month’s rather rosy editor’s letter it turns out taken from Actovia. We worked with Ac- that there is still quite a good deal of distress tovia’s founder, Jonathan Ingber, to find who out there, even in the New York area, though the biggest lenders were in the area for the it is predictably focused in the boroughs or month of March, as well as the most active Upper Manhattan. zip codes for commercial real estate financ- Keeping with the theme of distress, we ings and the total sales, by borough. The also caught up with Jordan Ray, from Mis- charts should be easier to read, with infor- sion Capital Advisors, who had his own take mation easy to glean. on distress and where the New York City Please let us know what you think of the market stands in general. new design and, as always, share your deals One of my personal favorite things to learn or any tips. about this month was the recap of 14 Wall Street, an iconic building in the Financial District, originally the Bankers Trust Build- ing. The 31st floor was at one time the home of J.P. Morgan himself. The deal was complicated to pull off, with many moving parts and Carl Gaines, Editor

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ADpage.indd 30 4/19/12 1:37:11 PM News Exchange / May 2012 Note sales, investments, mortgage originations, mergers and acqusitions.

Industry Research factors that are causing this, and other, trends. With the U.S. Supreme Court currently weighing arguments about the constitutionality of portions of President Barack Obama’s Pa- Cross-Border tient Protection and Affordable Care Act, the health care industry is facing many unknowns. Marcus & Millichap’s recent Medical Office Re- Investment Goes Global search Report charts the effect of these unknowns on the sector. It also takes a look at who the most active buyers of health care assets will be in 2012. by The firm found that several trends were causing Marcus & Millichap’s report found that private Carl Gaines this—most notably an amassing of equity in sover- investors are set to take the lion’s share of medical eign wealth funds in the Middle East and Asia, recent office activity this year—particularly REITs and in- Made up 22 percent of total 2011 political upheavals in these regions, and corporate stitutions. { transaction activity. } revenues from oil and natural resources. This last cat- With so many unknowns existing in the indus- egory, Mr. Lyons said, has brought new regions into try—such as the Supreme Court hearings—rents Data from real estate investment and advisory firm the global cross-border investment landscape. are trending downward, as more medical offices Savills show that global cross-border investment “We’re starting to see more capital to come from put off making decisions about their space needs. reached its highest level in three years in 2011—mak- emerging countries—those that have natural resourc- On a nationwide basis, rents declined 1.9 percent ing up 22 percent, or $120 billion, of the $550 billion es,” he explained. “Those include Brazil, Mexico in 2011. The report found this particularly true in in total global transaction activ- and Canada, which have been areas like New York City. Asking rents are project- ity for the year. starting to export their capital ed to continue to decline in 2012. Five U.S. markets made and to acquire world-class as- Private investors are anticipated to participate it into Savills’s top-10 list of sets in world-class cities. in the most acquisitions in 2012, with REITs and global property markets, with The make up of those institutions targeting the off-campus buildings af- the New York City metro area world-class cities, however, filiated with health systems. CG at $33.8 billion and Washing- will remain largely unchanged ton, D.C., Los Angeles, San throughout 2012, if Mr. Lyons’s Francisco and Chicago trailing predictions hold true. He said behind. In all, they attracted that he anticipates the rank- At Over $60 Billion, $88.7 billion in capital. None- ings of top property markets to theless, Savills USA president remain where they are—New Wells Fargo Again on Top and CEO John Lyons told York City, London, Tokyo, The Mortgage Observer that Washington, D.C., Paris and so the U.S. share ultimately sur- on, but with one caveat. HFF earned second place in the prised him. “In 2011 D.C. was four—to { MBA list, Meridian takes third. } “Considering the mas- John Lyons from Savills me there has been a lot of ac- sive upheaval in the Middle tivity both around and in D.C. The Mortgage Bankers Association last East—a lot of capital went to Europe and the U.K. but the volume of deals in 2011 was a little bit lower week released its annual ranking of loan originations. in particular—I thought that there would be even than anticipated,” he said, pointing out that the gov- The data are broken into several metrics—such as more capital coming to the United States,” Mr. Ly- ernment’s contraction of its space there was not as originations for third parties and originations by inves- ons said. He added that there has been an increase drastic as had been predicted. “I’m optimistic that it tor group. However, for several categories, including in U.S. activity among Middle Eastern investors and will increase in 2012.” total originations, Wells Fargo once again came out speculated that this was possibly due to rising prices on top. in areas that had previously been attracting them. The bank’s commercial real estate originations for “It’s possible that prices have risen fairly dramati- 2011 hit $60.2 billion, putting it way ahead of the other cally in the U.K., where a lot of the Middle Eastern Medical O ce Big Among institutions in the top five. HFF came in at number money had gone, as well as in some of the other cities Private Investors in 2012 two on the list, with $20.6 billion, followed by Merid- in Germany, which are the two strongest bastions for ian Capital Group, CBRE Capital Markets investment in Europe,” he said. This money wend- and PNC Real Estate with $17.3 billion, $16.5 bil- ing its way to the U.S. perhaps took a little longer Medical o ce rents declined 1.9 lion and $15.8 billion, respectively. than expected, Mr. Lyons added. { percent in 2011. } Alan Wiener, group head at Wells Fargo The Savills cross-border investment data show a Multifamily Capital, told The Mortgage Ob- 50 percent increase in overall activity in 2011 com- According to data from Marcus & Millic- server that the bank’s volume of originations in the pared with the year previous, when it was respon- hap, private investors are set to take the lion’s New York City area for 2012 will continue apace. sible for $61 billion out of a total of $460 billion in share of medical office activity in 2012. The “On the permanent side last year we did about $6.5 global transaction activity. firm’s Medical Office Research Report charts the billion,” Mr. Wiener said. “We were the number one

TMO.0512.NewsExchangeCS3.indd 4 4/19/12 5:12:04 PM May 2012 / News Exchange

permanent multifamily lender in the country in 2010, 2011 and we will be in 2012 as well—so it’s a lot of real estate.” On tap this year for Wells is the refinancing of 14 Wall Street Recapped 15,000 units at Co-op City. Mr. Wiener pointed out that Wells has a hand in many large-scale deals in the city, as administrative agent on syndicated loans such as the $530 million by Carl Gaines construction loan provided to the Gotham Orga- nization for its development on the far West Side. “Generally our holds are much larger than anyone Capstone Equities in, Carlyle Group out in deal that else’s,” Mr. Wiener explained. “So you will see us on { values property at $300 million. } most of the large deals.” Life insurance companies remained strong with Ukrainian billionaire Alex Rovt has recapped 14 Wall Street in a deal that two showings in the top 10—MetLife Real Estate values the 1.1-million-square-foot iconic property at roughly $300 million. Investments originated $11 billion, which landed it Josh Zamir’s Capstone Equities, which bought the building in 2007, in sixth place, and Prudential Mortgage Capi- will remain managing partner and replace the Carlyle Group. Robert tal Co. landed at number eight, with $9.7 billion in Verrone, principal at Iron Hound Management Co., represented Cap- originations. stone in the recap. The Carlton Group chair- For U.S. multihousing agency originations from all man Howard Michaels told The Mortgage sources CBRE Capital Markets came out on top in Observer that he had repped Capstone as well. 2011, with over $8.7 billion in loan originations, $1.1 A team from law firm Duval & Stachenfeld billion of which was done in conjunction with life in- provided legal representation for Capstone. surance companies. According to Daniel Ghadamian, principal “In recent years, CBRE has built a strong and com- at Capstone, the first mortgage left on the build- prehensive agency loan production platform, which ing amounts to $245 million—the rest is equity. has enabled us to capitalize on the healthy appetite Leasing activity there, Mr. Ghadamian told for multihousing property investment,” Brian Stof- The Mortgage Observer, has been bolstered by fers, president of CBRE Debt & Equity Finance said the security Mr. Rovt has brought. “Since buying in a prepared statement about the results. “This robust the building, we’ve leased about 700,000 square platform has given us a distinct competitive advantage feet there,” he said. “Yearly leasing there has in serving the capital needs of investors targeting mul- averaged about 200,000 square feet recently. At tihousing opportunities.” this time, the building is gaining considerable in- Part of that platform includes its Fannie Mae Daniel Ghadamian terest from sizable tenants attracted to a property DUS program, which accounted for almost $1.6 with stable, long-term hands on ownership.” billion in originations for 2011, the company said. CG Mr. Michaels, from the Carlton Group, said that Capstone had done a good job leasing up the building after purchasing it in 2007. “They leased 650,000 square feet of space,” he said of leasing efforts. “But at the end of last year, a 200,000-square-foot tenant moved out so the building had about Originations 250,000 square feet vacant.” Re- cent leases there include retailer Ironstate Development T.J. Maxx, which occupies space on the ground floor. Inks $33 Million Loan Those taking a peek now are primarily insurance companies, ar- chitects and creative firms. Seven-year loan taken for its Sources described the building, { Berkshire at the Shipyards. } pre-recap, as having an overlevered capital stack, consisting of a $145 Hoboken, N.J.’s Ironstate Development million securitized first mortgage, 14 Wall Street took a $33 million seven-year loan for its newly a $100 million note from Brook- constructed Berkshire at the Shipyard luxury field and a $75 million mezzanine loan from Shorenstein. A team from East- apartment building. The 13-story property is dil Secured, which was also involved in the recap, had tried since last year to sell located at 1401 Hudson Street in Hoboken and is Shorenstein’s mezz also played a role in the recap. Pressure had mounted as the comprised of 93 units. entirety was coming due in May 2012. Ironstate’s loan was negotiated by Meridian

TMO.0512.NewsExchangeCS3.indd 5 4/19/12 5:12:12 PM News Exchange / May 2012 Note sales, investments, mortgage originations, mergers and acqusitions.

“We worked closely with our territory sales Massey Knakal Closes team members, who have a very good pulse and $14 Million Loan in an up-to-date database on rental rates and market Williamsburg cap rates, to get the lender comfortable with today’s market value.” CG

Loan is secured by multi-family { buildings in Williamsburg. } 1401 Husdon Street Valley National Bank Pro-

The Mortgage Observer has learned that vides Surf Avenue Loan advisors David Cohen and Russ Drebin, from Massey Knakal Capital Services has the firm’s New Jersey office. closed a $14 million loan secured by eight mul- The loan has an interest rate of 4.12 percent tifamily buildings in Williamsburg. Thor Equities’ mortgage is for and was provided by a local savings bank, which The firm couldn’t disclose the lender’s or bor- { $7.4 million at 1122 and 1113 Surf. } Meridian declined to name. rower’s names, or the addresses of the buildings. “The property was recently completed and Morris Betesh, director at Massey Knakal Valley National Bank recently originat- is currently in lease-up,” Mr. Cohen said about Capital Services, worked on the deal—a cash- ed a mortgage for $7.4 million for some Coney Berkshire at the Shipyard, which is part of a out refinance. “The challenge in this trans- Island buildings at 1122 Surf Avenue and 1114 six building Planned Unit Development. “We action, which was a cash-out refinance, was Surf Avenue, the site of the Eldorado Bumper structured the loan with a flexible prepayment getting a lender to recognize the significant val- Cars. The buyer, Thor Equities, already penalty to allow the sponsor the comfort of ue that was created by a sponsor who had been owns nearby 1000 Surf Avenue. long-term financing with the flexibility to take working the asset over the last seven years of A spokesman for Thor Equities said that the advantage of projected increased cash flow in the ownership,” Mr. Betesh explained in a prepared company is “in the process of re-signing the future.” CG statement. lease for a year” to the Eldorado operators. It

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ADpage.indd 30 4/17/12 3:35:09 PM News Exchange / May 2012 Note sales, investments, mortgage originations, mergers and acqusitions.

then plans to redevelop the site, he said. The on-site parking and 20,000 square feet of space Vice president Erik Storz and senior vice reported purchase price that Thor paid for the dedicated to retail. president Stewart Campbell worked to origi- buildings is $4.5 million. CG The joint venture acquired the property in 2010 nate the loan to refinance the 492-unit property for $17.4 million by purchasing the note from the for the Moinian Group. It’s a fixed-rate, sev- previous lender. That all-cash transaction allowed it en-year loan with three years of interest-only pay- to execute a deed-in-lieu-of foreclosure. ments, the duo said. Meridian managing director Aaron Appel and Though this may sound pretty straight forward, vice president Michael Diaz worked on this most the deal was complicated due to the intercon- recent deal. nected nature of condo units at the building. “This project is unique in its nature,” Mr. Appel “Basically in 2000 the property was broken into said in a prepared statement about the financing. three separate condo units—each roughly 500,000 “The spectacular location of the building, the square feet and so there are common elements,” borrowers’ renovation expertise, and their deep Mr. Storz said. “The issue with Freddie Mac was market knowledge enabled Meridian to procure that they just wanted to be comfortable that their highly competitive construction financing with loan was safe and that condo unit number 1 was limited guarantees in a challenging construction not in a position where it could be negatively af- environment.” fected by the other condo units and the fact that they are sharing certain common elements.” Those shared areas and elements include the roof and parts of the ground floor, such as boilers. New York Community Because of this, the Berkadia team had to con- struct a deal that would satisfy Freddie Mac and Bank Refi s CMBS loan also work well for a borrower that, though not necessarily pressed for time, was eager to refinance its existing MetLife loan. 68 Ferris Street, next to Industry “They were paying a much higher interest { City, receives new fi nancing. } rate,” said Mr. Storz, “so we were able to lower their interest rate significantly, saving the bor- A building adjacent to Sunset Park’s Industry rower a tremendous amount.” 76 North 4th Street City—the 6.5-million-square-foot, 17-building This condo is known as the Ocean and is locat- business park—has had its maturing CMBS loan ed at 1 West Street, though the former Whitehall refinanced. Building has an address of 17 Battery Place. A source confirmed to The Mortgage Observer Mr. Stewart pointed to the building’s land- Sovereign Bank Provides that a $14 million mortgage that was originated on marked status as a factor making the complicated $28.4 Million Loan for March 23, 2012, was in fact the maturing CMBS on deal satisfying. 68 Ferris Street. “While it was a complex deal, the real estate Steelworks Lofts “Ownership refinanced it, dollar for dollar, with here really shone through,” he said. “It’s the type New York Community Bank,” the source of deal where you go through the structure be- said. “Essentially they are committed to preserv- cause the real estate is so good, as opposed to the Meridian brokered the deal for ing the property’s industrial nature.” opposite type scenario where it’s an O.K. deal but { Jacob Toll and Cayuga JV. } 68 Ferris Street is 270,000 square feet and two the structure is going to kill it.” CG stories tall. It’s currently being used as warehouse Meridian Capital Group brokered a $28.4 million distribution and flex space. CG acquisition and construction loan for a partnership between Cayuga Capital Management and Jacob Toll. The loan will be used for the completion of 66 Leonard Sells a mixed-use development project located at 76 1 West Street Condo Refi s for $6.5 Million North 4th Street in the Williamsburg section of Brooklyn. The loan is for a 36 month term and was provided Fixed-rate, seven-year loan in Street retail condo a familiar spot by a “regional balance sheet lender,” Meridian said. It { Moinian Group property. } { for foodies. } has a loan to cost ratio of 70 percent and a rate of Libor plus 2.9 percent. A spokesman for Meridian declined Berkadia Commercial Mortgage has The Mortgage Observer has learned that the retail to provide the lender, but sources said it is Sovereign closed on a $135 million Freddie Mac loan for condo at 66 Leonard Street has traded for approxi- Bank. the 446,000-square-foot condo unit on floors 14 mately $6.5 million. Eastern Consolidated Plans for the 110,000-square-foot spot call for the through 31 of the landmarked Whitehall Building principal and executive managing director Da- completion of 83 loft-style rental apartments—with in Battery Park City. vid Schechtman and senior director Lipa

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ADpage.indd 30 4/19/12 4:21:58 PM News Exchange / May 2012 Note sales, investments, mortgage originations, mergers and acqusitions.

was distributed today and the winning bidder is set to be selected on May 10, 2012. Build NYC Program Clears Neither the seller nor the address of the ho- $90 Million Financing tel was disclosed, though a few clues are available. For instance, the loan has a current unpaid balance of $100 million and is set to mature in YMCA will use money to reﬁ nance June 2016. It has a paid-through date of March { outstanding debt. } 11, 2009. The Midtown building where the hotel is The YMCA received approval from the city re- located was built in 1895 and underwent a $50 cently to borrow $50 million of funds through a new million renovation in 2004, including upgrades debt facility being administered by the Economic to public spaces and the rooms themselves. At Development Corporation. 216 keys, it had a 2011 RevPAR of $205.61. CG Called Build NYC, the funding window allows nonprofit groups to issue bonds to finance real estate development and other construction projects. The vehicle is not paid for by the city but by private Starwood Capital Group buyers of the bonds such as banks or other investors Said to Head to the Mall and offers below-market interest rates for the borrower because the proceeds on the debt are triple tax exempt. Spokesman declined to comment The YMCA will be using the money to refinance 66 Leonard Street { about the portfolio of malls. } outstanding debt and also to raise about $5 million to finish a stalled pool and aquatic center the orga- According to published reports, Greenwich, nization is building next door to its branch in Park Conn.’s Starwood Capital Group is on the Slope as well as to pay for other capital projects. Lieberman represented the seller and pro- cusp of acquiring majority stakes in a portfolio of “With today’s approval of this important tax-ex- cured the buyer, Mr. Schechtman said. U.S. shopping malls from Westfield Group, a empt financing, the YMCA will be able to reduce Ashkenazy Acquisitions—helmed by CEO Sydney-based retail property group. costs while increasing the number of critically and chairman Ben Ashkenazy and president and The purchase price is said to be roughly $1 bil- important services they provide to communities vice chairman Michael Alpert—bought the spot. lion and the seven malls have not been identi- across the city,” Seth Pinsky, the president of Neither could be reached for comment. The firm’s fied, though several are thought to be part of a the EDC and chairman of Build NYC, said in a other New York City holdings include the Knicker- group of malls Westfield put on the market last statement. bocker Hotel in Times Square and 660 Madison Av- year. Preliminary approval was also granted for another enue, home to retailer Barneys New York. A spokesman for Starwood Capital Group, large financing—a roughly $40 million debt offer- The seller was Tessler Developments, which is led by Barry ing that Montefiore Medical Center wants to issue which was represented by attorney David Kriss Sternlicht, declined through Build NYC to help pay for interior work on of Kriss & Feurstein. Meanwhile, Joshua to comment to The a 280,000-square-foot ambulatory care center it is Graff of Sukenik Segal & Graff served as Mortgage Observer planning to build at the Hutchinson Metro Center counsel for the buyer. about the speculation in the Bronx. Foodies will recognize the spot as the former surrounding the malls. Although interest rates are currently at near-his- home of Jean-Georges Vongerichten’s Matsug- The Westfield Group toric lows, the Build NYC program allows nonprofit en—the chic Japanese soba shop that closed after announced a sell-off of groups, which typically have tighter budgetary reits chef’s visa expired. CG noncore U.S. assets last straints than their for-profit counterparts, to reduce month. their cost of capital even a step further. The facility It could be a tricky began operation last month, providing $26 million time to get into the Barry Sternlicht to Manhattan College to allow it to refinance exist- Miscellany business of malls. Ac- ing debt it incurred in the early 2000s developing cording to the International Council of facilities on its Bronx campus. Mission Markets Note Shopping Centers’ most recent U.S. Mall “We have kept a tally here at the EDC of proj- Performance report, which looked mainly at last ects that were in search of these kinds of funds year’s holiday period, sales were not spectacular. and it amounts to $700 million,” Jonathan { Winning bidder to be selected on } In fact, even with the holidays in full swing, U.S. Gouveia, a senior vice president at the EDC May 10, 2012. mall sales fell slightly by 0.4 percent between said several months ago. “I have met with a num- Mission Capital Advisors is acting as the November and December 2011. ber of institutions and banks and not-for-profit exclusive loan sale adviser for a commercial mort- Malls in the western region of the U.S. were groups and many of them laugh at the $700 million. gage secured by a Manhattan hotel, The Mortgage off a whopping 2.9 percent and other regions They say that’s the tip of the iceberg.” Observer has learned. The offering memorandum were fairly flat. CG Daniel Geiger

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At Flushing Bank, we’re small enough to know you and large enough to provide you with the competitive lending and banking solutions you need. For more information visit your local Flushing Bank branch, call 800.581.2889 or go to www.FlushingBank.com.

1 All mortgages, loans and lines of credit are subject to approval. Certain fees and restrictions may apply. Flushing Bank is a portfolio lender with wide range of loan programs offering various rates and terms. All loan rates and offers are subject to change and termination without any prior notice. 2 New accounts with new money only. A new business checking account is defined as any new business checking account that does not have any authorized signatures in common with any other existing Flushing Bank business checking account(s). An existing checking customer is defined as anyone who currently has or has had a Flushing Bank checking account within the last 24 months. New money is defined as money not currently on deposit with Flushing Bank. The annual percentage yield (APY) for the Business Checking Plus Interest is .75% for daily account balances of $15,000–$99,999 and 1.00% for daily account balances of $100,000 and greater. This rate will remain in effect for 90 days after account opening. At the end of this 90-day Guarantee Rate Period the rate will revert to the standard tier pricing for the account. The APY is effective May 1, 2012. You must maintain a daily balance of $15,000 or greater for the statement cycle to receive the disclosed yields. You must deposit a minimum of $100 to open this account. No minimum balance is required to avoid a monthly maintenance fee. The rate and offer are subject to change and early termination without prior notice at any time. Other fees and restrictions may apply. Speak with a Flushing Bank Business Banker for more details and information. Flushing Bank is a trade name of Flushing Savings Bank, FSB.

2012-04-17 Flushing RE Ad for the Comm Mort Obs REV.indd 1 4/17/2012 12:45:08 PM ADpage.indd 30 4/17/12 3:40:31 PM In-Depth Look/ May 2012 A comprehensive take on CRE finance trends

leading players in this market include Wells Fargo, For Select Few, M&T Bank and Natixis. Wells Fargo led a consortium of four banks in providing a $180 million construction loan for Harry Gross’s 70-story, mixed-use tower at Construction Broadway and 54th Street. The tower will include four floors of retail and two hotels—a Marriott Courtyard Hotel and a Marriott Residence Inn. Financing Available Local lenders as well as credit unions were the source of financing for such hospitality assets as the recently completed OUT NYC on West 42nd Street and the Courtyard by Marriott in Newark, N.J., the “Our partners in construction financing include first new hotel in that city in over 40 years. by Michael Stoler Capital One, TD Bank, Bank of America, Merrill REITs and private equity firms have provided Lynch and Wells Fargo.” Other lenders joining in the construction financing for specialty projects, including The residential rental market in Manhattan and the financing include PNC, HSBC and JP Morgan Chase. hospitality and rental and condominium developments boroughs is hot—in fact the biggest news during the Insurance companies like Prudential Mortgage Capital that may have been in various stages of development. month of April involved the reports that residential Co. are also interested in construction financing. These lenders as well as local community banks are rents in Manhattan in the first quarter of 2012 had Well-established developers, including Glenwood offering construction financing to less experienced reached their highest level since 2002, when these Management, Rose Associates, Related Companies, developers at significantly higher rates. data were first collected. The average rent went up 6.5 Durst Fetner, Rockrose and Rudin Management, are A number of local lenders have expressed an interest percent over the past year, according to Citi Habitats, benefiting from construction financing at the lowest to enter the construction financing marketplace. while Prudential Douglas Elliman reported that the rates in history, ranging from as low as 250 to 400 basis James Freel, senior vice president and chief real median rent jumped 9 percent in the first quarter of points over Libor. this year. Regional lenders have According to data from RentJuice, rents are also also joined the ranks of those 51 Astor Place rising in Brooklyn. The company’s Rent Index interested in financing for charted rising rents in Park Slope—which saw a drastic rental and for sale housing. increase in asking rents, up 18 percent since the end In the case of certain smaller of 2011. Park Slope is also leading the city with the lenders, pricing is higher and largest increase in price per square foot, which rose in many instances it requires by 30 percent. In other neighborhoods, rents are recourse to the borrowers. on the rise as well—up 12 percent in Williamsburg, Based upon the financial 23 percent in Brooklyn Heights and 10 percent in capitalization of the Greenpoint. borrower, office buildings With rents rising to all-time highs, real estate have the opportunity developers are scrambling to put up rental and to secure construction condominium apartments. But while demand for financing. For example, in new residential apartments is rising, the availability of Newark, N.J., Panasonic capital from the lending community continues to be and Prudential are building tepid, according to experts. new towers with financing Nevertheless, financing is available for well- led by PNC and TD Bank. established real estate developers who invest between Bank of America Merrill 30 percent and 40 percent in equity and have solid Lynch has been one of the most active administrative estate officer, Institutional Asset Management and experience in the residential apartment business in agents in construction financing. It arranged for Custody at Amalgamated Bank, said that the bank is New York City and nearby New Jersey. It’s flowing $165 million in financing for the construction of working on the development of a new construction from both money center banks and regional lenders Edward Minskoff’s 400,000-square-foot office tower loan investment fund. “We feel there is a need for and hasn’t been limited to Manhattan developments, at 51 Astor Place, which is being developed without construction financing,” Mr. Freel said. He added that either. Lenders are interested in well-planned projects any tenants in place. However, Mr. Minskoff, an Amalgamated Bank’s fund is expected to be launched in Downtown Brooklyn, Williamsburg, Long Island established developer with a proven track record, has during the fourth quarter of 2012. City, Hoboken, Jersey City, Fort Lee and neighboring significant capital in the project. All of this makes one thing certain—banks are locations. With hotel occupancy near 85 percent and room interested in providing permanent financing for In many instances the banks are joining together to rates rising, a few prudent lenders are interested in low leverage, well-capitalized assets. With rising syndicate the financing. “In this environment we are providing construction financing for the hospitality competition for transactions as well as the possible syndicating and clubbing our financing,” said Gino industry. return of CMBS financing, lenders may reduce Martocci, regional president, New York City and Long The major requirement for financing this asset class their stringent underwriting requirements and offer Island at M&T Bank, one of the most active lenders. is equity of between 40 percent and 50 percent. The construction financing before the end of 2012.

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BADpage.indd 30 ERKLEY4/19/12 4:27:30 PM Scheme of Things / May 2012 Monthly charts of commercial real estate financings in the five boroughs

Mortgage Charts

The Mortgage Observer has compiled a month’s snapshot of top commercial real estate financings Top Ten Lenders in New York City. This month we take a look at For March, New York Community Bank stayed in the top slot with 145 financings in the New York tristate area, refinances versus purchases, top recent lenders, compared to 93 the month previous. NCB bolted onto the list with 25 for March. According to the bank, it total sales by borough and the six zip codes that generated $72 million in new cooperative financings in the area over the course of the month. saw the most action. Data is drawn from Actovia, which tracks mortgage information and stream- lines leads from city records. BANK FEB 2012 BANK MAR 2012 New York Community Bank 93 New York Community Bank 145

M & T 44 Signature Bank 73 Refinances vs. Purchases JP Morgan Chase 44 Capital One 45

The past several months have seen a jump in the Signature Bank 31 JP Morgan Chase 43 velocity of commercial real estate refinances — with March topping out at 960, after hitting 559 in February. Capital One 24 Astoria Federal Savings Bank 41 Purchases increased slightly, to 203 in March. Astoria Federal Savings Bank 24 Dime Savings Bank of Williamsburgh 33

960 Dime Savings Bank of Williamsburgh 22 NCB 25 Investors Savings Bank 18 Investors Savings Bank 21

559 Flushing Savings Bank 17 Flushing Savings Bank 18

Bank Leumi 11 Apple Bank 16 203 139

FEB MAR FEB MAR REFINANCES PURCHASES Total Sales by Borough

In March Brooklyn remained the hottest borough for sales, though theydecreased slightly to 163. Queens saw the biggest jump—43 additional sales during the month.

Six Most Active Zip Codes 418 404 Upper Manhattan and the Ridgewood section of Queens jumped onto March’s list of most active zip codes.

ZIP CODE FEB 2012 ZIP CODE MAR 2012

10003 21 11237 33 166 163 18 26 11211 11221 124 94 105 10024 14 10033 23 52 56 62 10019 14 10025 20

10458 14 11211 20 FEB MAR FEB MAR FEB MAR FEB MAR FEB MAR 11222 13 11385 20 ALL MANHATTAN BRONX BROOKLYN QUEENS

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ADpage.indd 30 4/17/12 1:27:24 PM The M.O. Columnists / May 2012

things” a borrower might do—they are terms and obligations that prohibit just the consequences of financial dis- transfers and require the borrower to Stein’s Law tress. They shouldn’t trigger liability remain “separate” or a “single-purpose for the guarantor. entity.” These concepts have accreted Therefore, parse through events that over time, with the result that they might trigger personal liability for the now impose on a borrower a list of ob- Better Luck entire loan. ligations both great and small. Some If any language in trivial violation of one of a carveout guaranty those obligations shouldn’t Next Time could be construed to make a guarantor liable for trigger personal liabil- the entire loan. ity under such circum- For example, the loan When the refinancing closed, the nonrecourse carveouts.” stances, the guarantor documents might require real estate investor—the principal of Recent cases have, however, thrown and their counsel need the borrower to remain a the borrower—leaned over to his coun- curve balls to guarantors of “standard to get rid of it. Oth- “single-purpose entity.” sel and asked just two questions. The nonrecourse carveouts.” Courts have erwise, the “carveout The loan documents might first related to the interest rate on the found them liable for the entire loan guaranty” amounts also say that a “single-pur- loan. The second question, the only under circumstances that never should to an unintended full Joshua Stein pose entity” must have a other thing the investor really cared have triggered such liability. guaranty of the loan, separate telephone num- about was, “Show me the personal First off, start with the principles that because that’s what it will become at ber. If the borrower shares a telephone guaranty. And can you promise me I’m drive nonrecourse guaranties. They are the only time that matters, i.e. when number with a related company, then not signing on for anything I didn’t supposed to discourage borrowers from the property gets into trouble and the this might trigger a claim that it’s not agree to guarantee?” doing bad things. But then ask what loan heads toward default. a “single-purpose entity,” thus making It was a bedrock proposition that might happen if a property starts to get Guarantors and their counsel also the guarantor liable for the entire loan. guaranties wouldn’t cover the entire into trouble. What are the ordinary con- need to focus on two areas that don’t A guarantor and their counsel might loan, just particular deal-specific sequences of financial distress for com- always tie to the property’s financial respond by saying that the guarantor risks and a typical list of “standard mercial real estate? Those aren’t “bad performance: intertwined defined shouldn’t face liability because of such

The Basis Point ery in securitization underscore its ten- as for apartments, core properties in tative condition. New York, Washington, D.C., and Contrasting sparse deal flow in the other cardinal markets have been bol- CMBS market, agency issuance of stered by a relative surfeit of secured A Disappointing multifamily-backed bonds set a new refinancing through life companies and cord in the first quarter. Backed by the domestic and foreign banks. Acquisi- agencies’ dominant share of the heady tions by REITs, funded by unsecured First Quarter apartment lending market, multifam- debt and by cross-border investors, ily deal volume more than doubled the have hastened the recovery in these commercial tally. While Fannie Mae privileged locations. for CMBS and Freddie Mac hold some loans on For a broader range of assets— balance sheets, securitization has al- outside of the most actively traded lowed the agencies to contain their markets—constraints on the availabil- The CMBS market al financial stresses have growth, obliging a key objective of ity of credit remain a difficult reality. It is struggling to assert eased, spreads have nar- conservatorship. Securitization has is in these settings, rather than for the itself. Following a surge rowed and conduit lend- also met with strong demand from in- most rarefied assets, that a sustained of activity in March, is- ing has picked up again. vestors ready to trade yield for agency recovery in conduit lending will mete suance volume in the In turn, the issuance cal- bonds’ unique risk profile. On April 9, out the greatest benefits. Projections first quarter reached just endar has been revivified. Freddie Mac announced the latest in for 2012 anticipate rising CMBS vol- $6 billion, down almost Among the most recent a string of deals backed by seven-year ume and market share, albeit under a third from a year ear- deals, JP Morgan priced term apartment loans. Of the largest an assumption that shocks to financial lier. The disappointing the first post-financial cri- 10 loans, four bear mortgage rates less market functioning will be subdued. result reflects volatile Sam Chandan sis pool of nonperforming than 4 percent. That exceptionally low Reliant on well-diversified collateral, corporate and CMBS loans in early April. cost of financing reflects exceptional conduit lenders are necessarily more spreads that undercut conduit lending The oversubscription of that fast- demand for agency bonds but also active outside of cardinal markets, in in the second half of 2011, trimming pay liquidation vehicle underscores threatens to foment undue risk-taking locations where the lender landscape the pipeline of loans for securitization a more optimistic outlook for CMBS, by investors and competing lenders. is more thinly populated. in the New Year. As domestic and glob- even as the fits and starts of the recov- Though not to the same degree Banks increased in their net lend-

TMO.0512.CS3.Columnists.indd 16 4/19/12 3:59:44 PM issues unless those issues actually collateral and let the lender keep it. result in the problem that they were But the law generally does not allow designed to prevent. Specifically, the a borrower to give the lender the keys guarantor would become liable for the unless the lender agrees to accept loan only if these issues caused the them. So even if a borrower wants to Planning, nancing, borrower to become “substantively roll over and let the lender have the and building for consolidated” with another entity collateral and cut off any further po- in a bankruptcy proceeding. Unless tential exposure and issues for the the future. that happens, the lender doesn’t re- guarantor, they can’t. ally suffer any loss. Some sloppiness Tomorrow’s guarantors may say in this area might marginally increase that, no matter what, their liability the lender’s risks in a possible fu- should stop accruing if the borrower ture bankruptcy—but that by itself offers the lender a deed to the collat- shouldn’t trigger personal liability for eral or functionally equivalent control the entire loan. of the collateral. This wouldn’t neces- A guarantor also should insist on sarily terminate any guarantor liability having a chance to repair any problem that already existed, but it would give that might otherwise trigger personal borrower and guarantor an easy exit, liability. For example, if the lender consistent with the underlying theory were concerned about the borrower’s of nonrecourse loans. Without it bor- shared telephone number, the lender rowers don’t have a right to walk away, should first give the guarantor a chance which was the whole point. to solve the lender’s concern. Guarantors and their counsel might Joshua Stein is the sole principal of also note that the whole theory of a Joshua Stein PLLC. The views ex- nonrecourse loan contemplates that a pressed here are his own. He can be borrower can “walk away” from the reached at [email protected].

ing in the fourth quarter of 2011, have been at pains to emphasize the supporting an improvement in lend- conservatism of underwriting in post- ing. But constraints on regional and crisis issuance. While laudable, this community banks’ capacity to extend cyclical focus on risk is not a substi- credit in support of smaller markets’ tute for structural measures that will commercial property sales and refi- ensure the long-term health and sus- nancing needs are likely to persist for tainability of CMBS. some time. In segments of the market Many of the structural weakness- where the management of legacy dis- es of the CMBS market—including Real estate and construction management professionals do more than buy, sell, and build. tress remains unwieldy, regulatory de- conflicts in the incentives of the vari- They analyze and structure the nancing so we can plan and shape our skylines, develop mands may still require a drawdown ous parties facilitating each issue— critical infrastructure that supports the way we live and work, create affordable housing, and of banks’ exposure to the commercial have yet to be fully addressed. In build new communities. The NYU Schack Institute of Real Estate offers noncredit courses and property sector. Given a paucity of the interim, the absence of structural certi cates in Real Estate, Real Estate Development, and Construction Management to meet alternative credit sources in these lo- corrections of weaknesses ranging the needs of industry veterans, career changers, and recent graduates. Online and traditional cales, an acceleration of conduit lend- from rating agency compensation course formats available. Learn more about our broad array of condensed summer ing will support liquidity and pricing. to the potential for special-servicer intensives at: scps.nyu.edu/x550b. A resurgent CMBS market is not conflicts of interest means the cur- an unqualified improvement over the rent bias in favor of conservative status quo. The market risks further underwriting might still give way to Information Session: NYU Kimmel Center, 60 Washington Square South, New York, NY buffeting if activity rises, only to see inefficient risk-taking as the level of Real Estate: Sales, Appraisal, Finance, momentum slow in a renewal of glob- activity normalizes. Investment, Development, and Management Thursday, May 3, 6–8 p.m. al financial stress. There are other crosswinds. Market participants have Sam Chandan, PhD, is president Explore Programs and Register Today for Summer! focused their attention on regulatory and chief economist of Chandan Eco- initiatives such as risk retention, but nomics and an adjunct professor at scps.nyu.edu/x550a meaningful self-regulation and offsets the Wharton School. The views ex- 212-998-7150 of incentive conflicts remain works in pressed here are his own. He can be

progress. The industry’s advocates reached at [email protected]. New York University is an afﬁ rmative action/equal opportunity institution. ©2012 New York University School of Continuing and Professional Studies.

17 Seiter&Miller 000794 Pub. Mortgage Observer Size 4.5x11 Issue 04/24/12 Art Director: sd/mm Copywriter: ms Account Executive: wt Date 04/16/12

TMO.0512.CS3.Columnists.indd 17 4/19/12 3:59:51 PM Work Force / May 2012 Hirings, promotions, defections and appointments

Brian Obergfell, a Meridian Capital Group has made several 1980s and retired from in 2010. senior partner at Em- new hires recently. Sean Mooney, Michael Ot- “We are thrilled to have Rich and Jack join the met, Marvin & Martin tomanelli and Ryan Gandell all joined within the firm,” Mr. O’Neill said. “Rich brings a strong analyt- LLP, has been named to past several months. ical background, excellent client relationships and the newly formed State Mr. Mooney, who was hired as a senior vice presi- broad capital markets transaction experience. Jack Charter Bank Adviso- dent and reports to Meridian’s senior management has a long history of working on numerous bank ry Board by Benjamin team, works on loan origination, debt and equity transactions from his days at Sandler O’Neill, along Lawsky, the superinten- placement, and client relationship management. with his more recent experience in the hedge fund dent of financial services Mr. Ottomanelli rejoins managing director Tal Bar- and private equity markets. I look forward to work- Brian Obergfell for New York State. Or, whom he had previously worked with at People’s ing with him again.” The new board, which United Bank in the distressed debt and loan workout Neither was available to comment to The Mort- represents banks with assets from under $500 mil- group. He is working on the underwriting and place- gage Observer about his new role. lion to more than $3 billion, is designed to promote ment of loans for institutional clients. the state banking system. The board is made up of Mr. Gandell, hired as an associate working on nine members, who serve three-year terms. loan origination, will report to Seth Grossman, the Ladder Capital has nabbed commercial real Mr. Obergfell is a senior partner in Emmet, head of Meridian’s Carlsbad office. estate veteran Michael Mazzei from Bank of Marvin & Martin’s corporate and real estate group, America, where he served as managing director specializing in American depositary receipts and and global head of the CMBS and bank loan syn- CMBS, and serves on the firm’s executive and dications groups. He’s been appointed president strategic committees. Ethan Penner has of the company. Meanwhile, current president and left his role as president cofounder Greta Guggenheim will become chief of CBRE Capital Part- investment officer. Peter Von Der Ahe, ners, effective March 31, Mr. Mazzei joined BofA in 2009. No word on the top producing multi- “in order to pursue new when he’ll officially start in his new position—a family agent in Marcus entrepreneurial opportu- spokesperson for Ladder Capital declined to com- & Millichap Real Estate nities,” according to an ment to The Mortgage Observer beyond the infor- Investment Services’ emailed statement from mation provided in a release about the move. Manhattan office, has company spokesperson “My time at BofA Merrill Lynch was a great ex- been promoted to first Ethan Penner Pam Barnett. perience,” Mr. Mazzei said in a prepared statement. vice president invest- The statement went “The team was able to reduce virtually all of its ments. He is also a direc- on to call his departure “a mutual decision.” legacy CMBS assets and restart the CMBS 2.0 busi- Peter Von Der Ahe tor of the firm’s national According to Ms. Barnett, “Frank Scavone, who ness. I have also been fortunate to have gained great multi housing group. has worked closely with Ethan for many years, is relationships and friendships at BofA Merrill Lynch In 2011, Mr. Von Der Ahe and his team closed now leading CBRE Capital Partners.” He has been that will continue into the future.” 21 transactions with a combined value of $133 named president and COO. She added that Mr. A capital markets guru, Mr. Mazzei will work to million, including the portfolio sale of five Mid- Scavone, Jenna Gerstenlauer, Andy Glanzman help Ladder “develop its securitization platform town West apartment buildings valued at $25.7 and other members of the team will continue to ex- and expanding asset management business,” ac- million. ecute its investment strategy. cording to the release. Mr. Penner, often called a CMBS pioneer, will re- Prior to his stint at BofA, Mr. Mazzei was head main an adviser to the funds for the next six months of CMBS and commercial real estate debt markets Bruce Whipple, and is retaining “a substantial co-investment.” at Barclays Capital. In the late 1980s, he was also formerly a director Nomura Securities backed Mr. Penner financially a founding head of the CMBS practice at Lehman at Johnson Capital, in 1993 to start a real estate finance operation, which Brothers. has moved to Massey became Capital America. Knakal Realty Services as a director in the capi- Glen Kunofsky has tal services division. He Financial services firm Ranieri Partners has been named the top- will work on financing hired two managing directors. The two—Richard ranked single-tenant Bruce Whipple in the commercial real Bartolo and Jack Thompson—will be working retail agent at Marcus & estate debt markets lo- on a team led by Ranieri Financial Services CEO Millichap for the fifth cated throughout the New York metropolitan mar- Thomas O’Neill. year in a row. Mr. Kunof- ket, focusing on central and northern Westchester Mr. Bartolo was a managing director in the fi- sky also ranked as one of County. nancial services group at SunTrust Robinson the firm’s top investment Mr. Whipple had also previously worked as a Humphrey, while Mr. Thompson joins from The Glen Kunofsky specialists for 2011. vice president at Northmarq Capital in New Mundane Funds USA, where he was a director re- He joined the firm in York and Westchester County, and as an origina- sponsible for a master fund and a global value fund. 2001 and was promoted to senior vice president in- tor in the Merrill Lynch and the Lehman Brothers He’s also a former principal at Sandler O’Neill + vestments in 2008 and is currently a senior director CMBS lending platforms in New York. Partners, the firm Mr. O’Neill founded in the late in its national retail group.

TMO.0512.WorkForceCS3.indd 18 4/19/12 5:01:09 PM New York Real Estate SummitNEW YORK REAL ESTATE SUMMIT The State of the New York Real Estate Market Wednesday May 9, 2012 The State of the New York Real Estate Market Proshansky Auditorium Graduate Center of The City University of New York Wednesday May 9, 2012 365 Fifth Avenue, New York, New York 7:30 AM to 1:30 PM Proshansky Auditorium Graduate Center of The City University of New York Program 365 Fifth Avenue, New York, New York 7:30 AM to 1:30 PM 7:30 AM to 8:30 AM Registration & breakfast 11:00 AM to 12:00 PM Private Equity, Commercial Lenders, Insurance

8:30 AM to 9:30 AM Keynote: CEO & COO’s View on the state of the market Company & Investment Bankers— Where do they Program 9:40 AM to 10:40 AM Developments in the region: New York City, Long want to provide funding in 2012 • 7:30 AM to 8:30 AM: Registration & breakfast Island & New Jersey 12:00 PM to 1:15 PM The State of the residential market—rental & • 8:30 AM to 9:30 AM Keynote: CEO & COO’s View on the state of the market 10:40 AM to 11:00 AM Coffee Break condominium in the region • 9:40 AM to 10:40 AM Developments in the region: New York City, Long Island & New Jersey • 10:40 AM to 11:00 AM Coffee Break Keynote Panel: CEO & COO’s Private Equity, Commercial The State• 11:00 AM to 12:00 Noonof the residential Private Equity, Commercial Lenders, Insurance Company & Investment Bankers ‐ View on the market Lenders, Insurance Company & market for rental & Where do they want to provide funding in 2012 • Alfred Brooks, President, Chase Commercial Investment Bankers-where do condominium• 12:00 PM to 1:15 PM in the region The State of the residential market‐rental & condominium in the region Term Lending we want to provide funding • Ofer Yardeni, Managing Member & Co- • Russell Appel, President, The Praedium Founder, Stonehenge Partners • Joseph Ficalora, President & CEO,New York Keynote Panel: CEO & COO‐View on the Private Equity, Commercial Lenders, Insurance Community Bank Group • James Carpenter, SR. EVP & marketChief Lending Company & Investment Bankers‐where do we • Brian Harris, CEO, Ladder Capital • John Connelly, Mgr Director, UBS Realty Ofﬁ cer, New York Community Bank want to provide funding The State of the residential • Michael Pappagallo, EVP & COO Kimco Realty Investors • Carl Goldberg, Partner,• Alfred Brooks, President, Chase Roseland Property market for rental & • Neil Shah, President & COO, Hersha • Richard Mack, North American CEO, AREA Company Commercial Term Lending • Russell Appel, President, The condominium in the region Hospitality Trust Property Partners • Joseph McMillan,• Jr.,Joseph Ficalora, President & CEO,CEO & COO’s DDG Partners Praedium Group CEO,New York Community Bank • John Connelly, Mgr Director, UBS • Larry Silverstein, President & CEO, • Gino Martocci, President, NYC & Long Is- • Amy Rose, Co-president,• Joseph Ficalora, President & CEO, Rose Associates • Ofer Yardeni, Managing • Brian Harris, CEO, Ladder Capital Realty Investors Member & Co‐Founder, land, M & T Bank • David Von Spreckelsen, President, Toll Silverstein Properties • New York Community BankMichael Pappagallo, EVP & COO • Richard Mack, North American CEO, Stonehenge Partners • Anthony Orso, Exec Mgr Director, Cantor • Emanuel Stern, President & COO, Hartz Brothers City• Living Michael PaKimco Realtyppagallo, EVP & COO, AREA Property Partners • James Carpenter, SR. Mountain Industries Commercial Real Estate • Kimco RealtyNeil Shah, President & COO, Hersha • Gino Martocci, President, NYC & EVP & Chief Lending • Adam Schwartz, Head, United States & Eu- Long Island, M & T Bank Developments in the region: • Neil Shah, President & COO,Hospitality Trust Officer, New York rope Real Estate Group, Angelo, Gordon • Larry Silverstein, President & CEO, • Anthony Orso, Exec Mgr Director, Community Bank New York City, Long Island & Hersha Hospitality Trust New Jersey • Jack Taylor, Mgr Director, Head of Global Silverstein Properties Cantor Commercial Real Estate • Carl Goldberg, Partner, Real Estate Finance Group, Prudential Real • • Larry Silverstein, President & CEO,Emanuel Stern, President & COO, • Adam Schwartz, Head, United States Roseland Property • Michael Berﬁ eld, SVP, Equity One Estate Investors Silverstein PropertiesHartz Mountain Industries & Europe Real Estate Group, Angelo, Company • Robert J. Coughlan, Principal, TRITEC Real Gordon • Joseph McMillan, Jr., CEO, • Gregory Walz, Mgr Director, Mortgage • Brian Harris, Chief Executive Estate Company Developments in the region: New York City, • Jack Taylor, Mgr Director, Head of DDG Partners Production, Northwestern Investment Officer, Ladder Capital • Roy Chin, Regional Director, Com Real Long Island & New Jersey Global Real Estate Finance Group, • Amy Rose, Co‐president, Management Company, LLC Estate, TD Bank • Emanuel Stern, President & COO, Prudential Real Estate Investors Rose Associates • Josh Zegen, Managing Director & Co- • Hartz Mountain IndustrieMichael Berfield, SVP, Equity Ones • Gregory Walz, Mgr Director, • David Von Spreckelsen, • K. Thomas Elghanayan, Chairman & Co- • Founder, Madison Realty Capital Robert J. Coughlan, Principal, Mortgage Production, Northwestern President, Toll Brothers Founder, TF Cornerstone TRITEC Real Estate Company Investment Management Company, City Living • Allen Goldman, President, SJP Residential • Developments in the RegionRoy Chin, Regional Director, LLC • Jeffrey Levine, Chairman & CEO, Douglaston New York City, Long Island & New JerseyCom Real Estate, TD Bank • Josh Zegen, Managing Director & Co‐ Development/Levine Builders • • Allen Goldman, President, SJP K. Thomas Elghanayan, Chairman & Founder, Madison Realty Capital ResidentialCo‐Founder, TF Cornerstone • Allen Goldman, President, SJP • K. Thomas Elghanayan, Chairman Residential

• & CoJeffrey Levine, Chairman & CEO, ‐Founder, TF Cornerstone Registration • Douglaston Development/Levine Cost of event: $250 Day of Event: $300 Checks only to: New York Real Estate TV, LLC Jeffrey Levine, Chairman & CEO, Builders Michael Stoler, New York Real Estate TV, LLC, 25 Sutton Place South, Suite 7M, New York, NY 10022

Michael Stoler, Moderator & Coordinator

For additional information contact: Michael Stoler (o) 646-442-0717 [email protected] www.newyorkrealestatesummit.com [Web Address]Registration: Cost of event: $250 Day of Event: $300 Checks only to: New York Real Estate TV, LLC Michael Stoler, New York Real Estate TV, LLC, 25 Sutton Place South, Suite 7M, New York, NY 10022 Michael Stoler, Moderator & Coordinator CUNY TV StolerCOMortgage.indd 30 For additional information contact: Michae4/19/12 3:57:43 PM l Stoler (o) 646‐442‐0717 [email protected] [Street Address] [Your Phone] [City], [State] [Postal Code] www.newyorkrealestatesummit.com

Power Profile / May 2012 2012 photography by Daniel M. Weiss © Weiss M. Daniel by photography

TMO.0512.CS3.KevinCummings.indd 20 4/19/12 4:05:25 PM May 2012 / Power Profile

Kevin Cummings Investors Bank’s Plan For Growth Mr. Cummings said the bank will focus on serving the underserved.

a smaller organization where you can be more of personnel changes, Investors entered the commer- by Ian Thomas an impact player and spend more time working in cial real estate market, albeit in an inauspicious the community would be the right move,” he said debut. About nine years ago right around St. Patrick’s recently at the bank’s Short Hills, N.J. headquar- “Well, I had black hair,” Mr. Cummings said Day, Kevin Cummings did something he always ters. with a laugh as he pointed to his hair today, more told people he mentored never to do. This year, Mr. Cummings was celebrating again of a light gray. “I changed my career because I took a call from on St. Patrick’s Day—this time as the grand mar- By the end of 2007, the bank had issued $379 a headhunter,” he said. shal of Newark’s parade, part of his latest step in million in commercial real estate loans—9 percent Mr. Cummings, who had spent 26 years at the an effort to transform a small community bank into of its total loan portfolio—with between $250 and independent accounting firm KPMG LLP, was one of the biggest players in the region. $270 million of that going to construction loans, asked if he could refer anyone for a chief operating Investors Bank, founded in 1926, has long been Mr. Cummings said. It was a large volume for the officer position at Investors Savings Bank. Famil- a staple in many New Jersey towns and communi- bank and, unfortunately, an ill-timed one. iar as he was with the bank—it was one of his cli- ties. But when Mr. Cummings rose from COO to “The good thing is we started in 2006,” he ex- ents during his time as an audit partner in KPMG’s president and CEO of the bank in 2008, he had plained. And then: “The bad thing is, we started financial services practice and in the New Jersey hopes for something more. in 2006.” According to Mr. Cummings, most of the community bank practice—he decided the best So far, the bank’s long-standing role has per- bank’s nonperforming loans were in fact originat- candidate he could nominate would be himself. formed well—it has expanded from 46 branches ed during that time period. After the events of 9/11 and reflecting on his to 87 branches, from more than $1 billion in core However, Investors followed those loan origina- career, which included 14 years as a partner at deposits to more than $4 billion today. tions up with a much better decision—investing KPMG, he had an epiphany. However, the bank was still primarily a residen- heavily in the multifamily market. “That’s our “My attitude changed, and I thought going to tial lender, and following its 2005 IPO and a few bread and butter,” Mr. Cummings explained. At

TMO.0512.CS3.KevinCummings.indd 21 4/19/12 4:05:31 PM Power Profile / May 2012

Our average loan is that space—a lot of people aren’t playing in that space. ‘ We’re just trying to be banker to that middle

the end of 2007, the bank had $44 million in oughs was a main impetus for the bank’s acquisi- The son of an ironworker, Mr. Cummings was loans and today the bank has more than $2 billion. tion of Brooklyn Federal last year, an acquisition raised in Jersey City, where he played basketball “Delinquencies are very low, and it’s a hot as- that allowed it to pick up five new branches, as as a child. The sport is still a passion for him to- set class right now,” he said. “Our timing couldn’t well as Brooklyn Federal’s commercial real estate day. have been better.” loan portfolio. “I play every weekend with a bunch of old Mr. Cummings has installed a set of core prin- However, Mr. Cummings and Investors didn’t guys,” he said with a laugh. “Ugly basketball.” ciples during his time as president and CEO of the stand still for that long, flipping the majority of the He lives less than a mile away from Investor bank. They’re all aimed at providing value to all portfolio for $200 million to a real estate invest- Bank’s main office and said that his commute, customers, regardless of size—something that’s ment fund less than six months later. short as it is, doesn’t even allow him to hear a led the bank to prosper in the current market. “It was close to 25 percent of nonperforming whole Billy Joel song unless he hits a traffic light. “We think we can service that real estate en- loans—so why have any guess work on what other His office is on the second floor of the a rather trepreneur who has maybe eight buildings,” Mr. problems they might have in the portfolio?” Mr. nondescript building in Short Hills, a town best Cummings explained. “He’s not sexy—he’s just Cummings said of the deal. known for the large shopping mall that sits directly a regular guy.” Investors kept the cleanest of the bunch—$88 across from the entrance to the office. Just outside “Our average loan is in that $3 million to $10 million in residential loans—but admittedly might his office, a green sign hangs with a quote from million space—a lot of people aren’t playing in have given up on some other good ones to stick to Mr. Cummings similar to one once spoken by New that space,” he said. “We’re just trying to be more its principles. York Yankee Joe DiMaggio: “I’d like to thank the of a relationship banker to that middle market “We probably gave someone a great opportu- Good Lord for making me an Investors Bank em- borrower.” nity, but at the end of the day it let us put our time ployee.” The bank closed on eight mortgage transactions where it’s more important,” he said. It goes without saying that Mr. Cummings be- at the end of 2011, each valued of $10 million or Growing the bank in a way that continues to lieves in the change that has been ongoing at the more for a total of $137.5 million. The deals in- provide value to its customers and clients has al- bank under his watch. cluded a $13 million adjustable-rate mortgage to ways been goal number one for Mr. Cummings, Since the new management took over, 37 of the refinance the loan on one multifamily housing who learned many of the lessons he uses today top 40 people are new to the bank, in what Mr. property with 80 units in Jamaica, Queens, and during his studies at Middlebury College and Cummings called “evolution, not revolution.” an $11.5 million fixed-rate mortgage to refinance while getting his MBA at Rutgers. His real estate group is currently made up of 14 multifamily structures on Leonard and Scholes “Accounting is the liberal arts education for people, a figure he'd like to increase by 50 percent streets in the booming Williamsburg section of business,” he said. “It taught me the importance over the short term. Brooklyn. of business development, mentoring and client “It’s more important to know what you don’t Hoping to further reach clients in the five bor- development.” know than trying to be the smartest guy in the

TMO.0512.CS3.KevinCummings.indd 22 4/19/12 4:05:36 PM May 2012 / Power Profile

$3 million to $10 million playing in that space. more of a relationship market borrower.

room,” he said. Mr. Cummings praised a number back into the marketplace right now,” he said. the size of the commercial real estate group. of his employees for the success the company has However, he did say there has been some sem- “We’ll make a great living serving the under- seen, including Richard Spengler, the company’s blance of a bubble in certain areas. served, we’ll work on the middle to lower end of executive vice president and chief lending officer, “There’s some irrational pricing out there, even the market, and we’ll give them service that they who joined from First Savings Bank in 2003, when on some construction loans,” he said. “We went won’t get at the large banks,” he vowed. Mr. Cummings was still COO. through the worst construction cycle, residential To achieve these goals, he’s drawing some That praise goes both ways. Reached by phone, real estate still in the doldrums, and we’re losing lessons from another successful manager in New Jer- Mr. Spengler used terms like “amazing” and “high deals with a 4 percent handle? We think that’s ir- sey: New York Giants’ head coach Tom Coughlin. energy”to describe his boss. rational pricing.” “You look at their team, and how they lost two “He's a unique CEO in the sense that when Mr. Cummings has been surprised about how’ games to Washington, Seattle and Philadelphia, we talk, he doesn't ask me to do more for him, he well office space has held up in but they ended up accomplishing what they did,” asks me what can I do to make your life easier— Manhattan though, even with the continuing he said. “If we can get people, all in, on the same what can I do to help you originate more loans?” levels of unemployment. “We didn’t have the glut page, working together, that’s a good lesson for Mr. Sprengler went on to add that Mr. Cummings in overbuilding that we had in the recession of the business.” is more dialed in than any other CEO he knows, late 80s/90s on the office side, so the pain hasn’t Mr. Cummings might often sound like a football jumping into the trenches with his employees and been as great as people had predicted.” coach. He described his current position as one of focusing on better utilizing their talents. “Back three to four years ago, there was talk a motivation speaker and instructor and he makes Asked about trends in the real estate market, about what we were going to do when all these a point to meet every employee within the com- Mr. Cummings didn’t even have to look further CMBS come due, what’s going to happen? The pany at least once a year to hear their thoughts and than his own home. other shoe hasn’t fallen yet,” he said. ways in which Investors Bank might improve to “My kids—they don’t want to buy a house,” he Still, despite tepid thoughts on the future of the better serve customers. said. “All they’ve seen since they’ve graduated economy, Mr. Cummings is sure about one thing: His passion and drive to make the bank a suc- college in the last 10 years is real estate prices flat the success of Investors Bank. cess goes all the way to the training of new em- or declining, so they don’t see it as an investment. “We want to be the most significant, premier ployees. During orientation speeches he and the They see it just as a place to live.” banking organization headquartered in the New rest of the management staff give to all new hires, Mr. Cummings sees plenty of growth opportu- York and New Jersey metropolitan area,” he said he tells them “If you don’t want to put your heart nities even within the multifamily sector, as the of his future goals. and soul into this, I’ll offer you $1,000 to leave.” density of population and demographics continue Mr. Cummings hopes to raise another $1 bil- “The last thing we want is people who are just to push growth within New Jersey and New York. lion in capital over the next two years, develop a here to suck air out of the room,” he said. “We “What’s amazing is the competition coming middle market business lending team and double want people who want to make a difference.”

TMO.0512.CS3.KevinCummings.indd 23 4/19/12 4:05:39 PM Note Sales / May 2012 Duly Noted Despite Q4 2011 drop in distress, Schechtman, Knakal and others rack up hundreds of millions of dollars in the deals.

by Carl Gaines second lowest level seen in two years. move through the pipeline. The accuracy of this The volume over the past few full year periods prediction may be backed up by Mr. Schechtman’s has also declined markedly—$140 billion in 2009 current workload. Even as commercial real estate prices have to $92.6 billion in 2010 to last year’s full year total “My belief is that, just based on the volume that improved and banks have swiftly moved troubled of $60.1 billion. So what gives? Why do note sales needs to transact, we are going to finish out this loans from their books, the phenomenon of distressed continue to be the product of the moment—with year with a record amount of transactions—both note sales has continued unabated. experts predicting an uptick, not a slowdown? in plain vanilla real estate but also in the loan and According to data from Real Capital Analytics, the David Schechtman, principal and executive distressed world,” Mr. Schechtman said recently at volume of newly distressed commercial properties managing director at Eastern Consolidated, told Eastern Consolidated’s offices. “There will still be dropped to $12.4 billion for the fourth quarter of The Mortgage Observer that he sees the volume a significant amount of portfolio lenders and special 2011—a figure that, as the firm pointed out in its of distressed note sales remaining steady for the servicers straight through 2013. Then I think how February 2012 Troubled Assets Radar report, is the immediate future because there remains a lot to much transacting there will be on the distress side

Peter Haupsburg and David Schechtman WILL O’HARE WILL

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My belief is that, will be a function of the new administration and some global economic forces.” For the time being, though, Mr. Schechtman just based on the and others dealing in the space have their hands full. For instance, Mr. Schechtman said that he had completed—since January 1, 2012—16 deals, volume that needs totaling over $300 million. Over at Massey Knakal, firm chairman Bob Knakal said that his team had done a steadily increasing volume of the deals recently as well. “In 2010 the to transact, we are volume was around $250 million and last year it was about $350 million,” Mr. Knakal said. He added that ‘ the firm’s business in this area will probably again going to finish out increase for 2012. “The reason that note sales have been so popular, particularly in New York, is because the foreclosure process is so long and cumbersome that it can take this year with a three or four years to foreclose on a property and if a lender forecloses the highest recovery they can possibly hope for is 94 percent of the collateral value of the property,” Mr. Knakal said. “One of the record amount of interesting things about the market is that generally it was perceived that about halfway through last year most of the banks had worked their way through transactions. their problems and that most of the note sales were coming out of special servicers.” This changed, Mr. Knakal said, toward the end of last year when bank problems again resurfaced. David Schechtman Other experts agreed that the foreclosure process in New York is lengthy—up to four years long— thereby impacting the volume of distressed note sales that take place in the tristate region. During this time a lot can change, including the borrower’s deal of the firm’s practice involves representing matured and the money was due and the borrower position. lenders in the foreclosure process. He echoed Mr. said ‘I can’t pay you off’ they extended it for two “The thing to remember with note sales is that Knakal’s sentiments about how lengthy it can be. years and nursed the loan along for two reasons. the borrower has the ability at any time to pay the “The foreclosure process unfortunately in the First, the bank became healthier—perhaps selling note off in full,” cautioned Mr. Knakal, whose firm past several years has moved to a stage of being the loan at a discount—and secondly the market currently has a note on offer secured by the Fordham exasperatingly long—several years,” Mr. Wenig would improve so that the value of the property and Robert Fulton towers in the Bronx. “When an said. “And depending upon the county it can take would increase and they might be able to get paid investor is looking at a note—let’s say the property is longer.” off.” ’ worth $60 million—the investor might say ‘Hey I’m Two main factors, he said, have increased the But also in flux during the foreclosure process may willing to pay the full amount for the note because chances of a foreclosure resulting in a note sale—and be the face of the parties involved themselves. Mr. I’m buying the property for less than it’s worth. But they may actually be signs of an improving economy: Schechtman and his team—which includes senior I have to keep in mind that until my foreclosure is healthier banks and improving commercial real director Lipa Lieberman, director Marion Jones and finished I could very easily have the borrower raise estate prices. associate director Abie Kassin—just executed a hard, the money and pay off the $54 million that’s owed “When the crisis first began I think lenders non-refundable $65.3 million contract for a note an I’m out.’ And my whole objective was probably to were in a position where they had an interest in secured by an eight building portfolio of buildings get into the ownership position on the property.” not classifying those loans as being in default,” on and around Broadway in Upper Manhattan. It’s Howard Wenig, managing partner at Belkin Mr. Wenig said. “That’s where the phrase ‘extend set to close around May 15, 2012. The borrowers Burden Wenig & Goldman, LLP said that a good and pretend’ came from—where if a loan was even included Neil Rubler from Vantage Properties and

TMO.0512.CS3.NotesFeature.indd 25 4/19/12 4:03:12 PM Note Sales / May 2012

The reason that note sales have been so popular, particularly in New York, is‘ because the foreclosure process is so long and cumbersome that it can take three or four years to foreclose on a property. Bob Knakal

Area Property Partners’ Richard Mack. to $30 million exclusive,” he said, secured by notes “By the first quarter of 2010 it was steady,” he Though he wouldn’t disclose the buyer, sources on 131 to 133 West 33rd Street. Other deals in the said, “and it has increased since January 2010 to the told The Mortgage Observer that it is Sentinel Real works include a Flushing Bay development site at point where we continue to staff around it.” Estate, helmed by John Streicker, which made a 39-08 Janet Place in Queens and 85 Flatbush Avenue “We knew the credit crisis was going to be very deal with Onex Capital Corp., which holds the $23 Extension and 333 Greene Avenue in Brooklyn. impactful by the end of ’07—it was very clear,” million in mezzanine debt on the portfolio. Onex, With this volume of business, staffing can be an said Mr. Knakal. “And so the beginning of 2008 sources said, will get a small return relative to the issue and both Mr. Schechtman and Mr. Knakal we started putting together a list of banks, special loan it wrote to walk away. said that their firms had taken appropriate measures servicers and starting to contact’ them. There really Mr. Schechtman pointed out that he was brought to staff up when they saw distress looming on the was no business to speak of in 2008 because a lot in 10 months ago by the special servicer, ING horizon. At Eastern, Mr. Schechtman, who said that of these banks and special servicers hadn’t even set Torchlight. “The person who engaged me to market he emulates mentor and firm president and CEO up departments to deal with the distressed loans in the secondary market this note, was a special Peter Hauspurg on and off the field, talked about because things, for a good part of 2008, still looked servicer,” he said. “The divisions of the lenders how staffing needs had changed because of distress. like they might be okay. But then the second half of today who are handling the disposition or otherwise After leaving law firm DLA Piper as a sixth year the year it really was clear that things were not going resolution of these loans are not the people who associate and landing at Eastern “to take on a desk to move well. So we started to see that activity start made the loans. And oftentimes it’s an amicable here—a cubicle—with no salary, no health benefits tangibly in 2009.” The boom in New York City came process.” and no promise of any income other than a phone, in 2010, when, he said, there was probably $6 billion Mr. Schechtman was also just hired several weeks the Internet and the Blue Book,” the prevalence of to $7 billion of note sale transactions. ago to represent General Electric—“It’s a $25 million distress necessitated additional hands on deck. Massey Knakal staffed up too. “We hired a director

TMO.0512.CS3.NotesFeature.indd 26 4/19/12 4:03:23 PM May 2012 / Note Sales

Bob Knakal kiki conway

of special assets and basically were using our existing we think that we’ll be raising additional funds as “Many of these assets eventually go through some sales force in conjunction with the special asset well as putting out our own capital to invest in both sort of a bidding process. We look for opportunities department to focus on these opportunities,” Mr. core assets that are generating current cash flows where we can think of the asset in a different way Knakal said. The firm currently has a new director in areas where we can get higher returns than the than it was thought of originally. So when we look of special assets—Matthew Dillon. trophy markets and then value added opportunities at a distressed asset we might see an asset that was At the end of the process, of course, is a buyer— in the trophy markets and in other markets as well. designed as a particular use and we might want to oftentimes, experts said, looking to gain ownership Including, as you’ve suggested, buying notes.” change that use. It may have been designed as a ’ of the property itself. Jacob Frydman is chairman and The notes Mr. Frydman and his colleagues condominium and we might find that repositioning CEO of United Realty Partners, part of whose aim is might target, he added, are likely to be secured by it as a rental is better.” to identify value-add and opportunistic real estate properties within two hours of New York City. “It It’s a strategy that doesn’t surprise brokers. investments. The firm is currently raising $2 billion makes it easier to get to in case there’s an issue and “The overwhelming majority of the time,” Mr. across several different funds to buy real estate, it’s the marketplace we know best,” he said. Knakal said, “getting into the ownership position much of it distressed, along the east coast. And, he Previously established relationships with is the objective” of the note buyer. He added that said, getting the note is one way to accomplish this. bankers, brokers and capital markets people help the increased demand has led to strong recoveries “We’re raising a private equity fund in Europe for them identify opportunities. “We also have close for clients. “The number of people interested in European investors who want to invest in the United relationships with various law firms that deal with buying notes continues to increase, so the demand States and that fund is called United Realty America these issues and we try to identify opportunities is very significant and that has led to strong Fund,” Mr. Frydman said. “The REIT we have in that are not yet on the market so that we don’t find recoveries for the clients that are selling notes,” Mr. registration is United Realty Trust Incorporated and ourselves necessarily in a bidding war,” he said. Knakal added.

TMO.0512.CS3.NotesFeature.indd 27 4/19/12 4:03:29 PM Q&A / May 2012 Jordan Ray Mission Capital Advisors This month, The Mortgage Observer spoke to Mission Capital Advisor’s Jordan Ray about the climate at Mission Capital Advisors, where he sees capital flowing and the importance of supercharging borrowers.

by age here is in the 30s. We all sort of rode the wave Ian Thomas of technology boom like everybody else did. One of the things that attracted me to Mission was that when The Mortgage Observer: Can you tell me a little they sell loans, generally investors know it is a very about your background and how you got started tech-heavy process, so we spend a lot of money on in real estate? proprietary data rooms and proprietary customer rela- Jordan Ray: I’ve been in the business since 2001. I tions management so we know exactly who is doing started out at Ackman-Ziff and I was there for almost what at any given time. Is lending loosening a little bit? Or is it still for the five years. I’ve been a commercial mortgage broker select borrower in select markets? and equity advisor for my entire career—ever since What’s the firm’s philosophy regarding growth? It always helps to have a high-class, very-top-tier spon- graduating from the NYU program. I grew up in Mon- We have very little turnover here, which is something sor. We’ve done a couple of deals where, especially on treal and in Palm Beach County, Florida, and went to that is rare. The guys who make the decisions about the construction side, where you have a great deal but school in D.C. at American University. this business all come from other brokerage firms. So in order to have it financeable in our opinion you need I started working at Ackman-Ziff when I was we’ve all seen the pitfalls of growth. We’ve seen good to bring in a partner to add horsepower to the borrow- in grad school—it was a great place to grow up in and bad. We’ve seen smart growth and we’ve seen just ing entity. So we’ve done a couple of deals where that this side of the business. In 2009 when the world adding bodies to add bodies because it makes more has been the case and we think that if you are going started to turn and there really wasn’t a lot of financ- money. We’ve been very slow to add bodies because to do a large construction deal, you sort of need to be ing, everybody started thinking about the future. when you bring someone in, you want to make a com- a bank’s … you need to be their one or two deals like It was an opportunity for me to come here to join mitment to them and you want to know that they’re that that year right now. Mission with a colleague of mine, Jason Cohen, be- going to be there for the long haul because we have a cause he knew the guys over here and Mission has very interesting environment. Where do you see capital flowing today? Is it the been one of the most active loan sales advisors in usual places? the country—selling about a billion dollars of sub- Regarding the economic climate—is there less Look, everybody likes to use the sound bytes and and nonperforming debt every quarter. And they uncertainty out there compared with six months they’re all the same—gateway markets and all that had no real finance desk. The idea was to come here or a year ago? boring stuff and you can even joke about that, but the and sell loans for a year to do something because We’re adding jobs slowly. We’re adding different reality is that there’s a reason we call them gateway there wasn’t much going on, but always have an eye kinds of jobs in places like New York. There’s a lot of markets and capital cities. Lenders and investors want toward starting the finance business when the mar- tech now—a lot less finance, a lot more tech. Rates are to be in markets where the recovery is happening the ket came back. Last year was our first year back in probably artificially low, as we all know. Unfortunately fastest. We’ve been doing a lot of work in New York, the finance business—we did about $540 million of I’m not much of an economist. I’m just an advisor, so D.C. and Miami. debt and equity. all I can do is try to find the best deals for my clients We did a large condominium project here in New at any given time in the cycle. I do know that when York last year where we brought in a very prominent Can you give me some idea of what your day-to- you look at some of the things that are holding our private equity fund to be a partner in the equity. It’s day is like? side down, i.e. banks that are stuck with product, too a deal on 18th street—210 West 18th Street. We rep- When a deal comes in I’m spending about 85 percent many loans clogging their pipelines, that stuff is fil- resented that venture to close in a $97.5 million con- of my time on the deal. Now that we’re hiring more tering out slowly. There’s more lending because the struction loan. That was a two bank deal. execution folks, I’m planning to spend more time cream is rising to the top a little bit but the healthy looking for new business. On the execution side when lenders are starting to lend and ones that aren’t are Where do you see the securitization market going we’re placing business we spend a lot of time up front sort of petering out. And that’s another point, by the these days? Is it picking back up? on a deal figuring it out. way, just to back up for a second. The loan sale busi- It’s certainly picking up. There’s a lot of fixed-rate se- We have a very heavy technology focus here at ness has helped us find and start relationships with curitization shops out there—secondary and primary Mission. That sort of sets us apart from where I used regional and local banks that I probably never would shops. When the securitization market is chugging it’s to be—not that there’s anything bad. It’s just a little have had before because those are the clients on the sort of a commodity. It’s about who can give you the different because we’re a younger firm. The average loan sale side. best execution.

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Untitled-31 1 4/19/12 5:23:52 PM CO24-7 House Ad Mortgage Observer.indd 2 4/19/12 4:38:22 PM Our picks for the month’s must-attend events May 2012 / Calendar

23-24 The region’s data centers—those anonymous build- The Sked: May ings with nary a window and rarely a visitor—may have immigrated to central and north New Jersey following the attacks of Sept. 11, 2001. But their largest tenants—stock and money managers like Goldman 2-3 Sachs and Credit Suisse, for example—still call lower It’s arguably one of the busiest streets in the country, Manhattan home. As such, it’s no shock that the In- and so, without a doubt, the decision to develop a formation Management Network is hosting its second sprawling residential, retail and schools project on annual data center consortium near Wall Street and East 57th Street raised a hornet’s nest of unique chal- the New York Stock Exchange, which, true to form, lenges. But for David Lowenfeld, an executive vice also stores its data across the Hudson. president of World Wide Holdings, alum of Harvard’s Second Annual Spring Forum on Financing, Investing Kennedy School of Government and a onetime & Real Estate Development for Data Centers; student of European intellectual history, the project Marriott New York Downtown, 85 West Street, 8 a.m. near Second Avenue posed plenty of philosophical to 7 p.m. Contact Andy Melvin at 212-901-0542 or conundrums, to be sure. For that reason alone, be email [email protected] for more info. sure to check out the former U.S. State Department advisor and writer of what became Pres. Ronald Rea- gan’s “Evil Empire” speech when he untangles the mysteries surrounding his company’s bid to build one Mortgage Bankers Association National Secondary Market Conference and Expo; New York Marriott 30-31 of New York’s most complicated commercial projects of the past decade. Marquis, 1535 Broadway. Call 800-793-6222 for More than a thousand real estate and financial ser- information. vices professionals will clamor for seats when the World Wide Holdings breakfast panel; Javits Information Management Network hosts its two-day Convention Center, 655 West 34th Street, Room outlook on private funds in the real estate world. Ex- 1CO1, 8:30-10 a.m. Email associatedbuilders@ pect funds across the Eastern Seaboard, as well as a 10 few from across the globe, to attend. abogny.com to RSVP or receive more information. The term “infrastructure renewal” can be used to describe the good works some developers and com- U.S. Real Estate Opportunity & Private Fund munity activists spearhead on a regular basis in order Investment Forum; Sheraton New York Hotel and 6-9 to spur economic development in underperforming Towers, 811 Seventh Avenue, near West 53rd Street, Fox News pundit Tucker Carlson and CNN political neighborhoods. Or it can be used to describe the 8 a.m. to 7 p.m. Contact Andy Melvin at analyst and former advisor to Pres. Bill Clinton strategies utilized by companies like Forest City Rat- 212-901-0542 or email him at [email protected] Paul Begala will headline a four-day Mort- ner, which is now in the process of building for more information. gage Bankers Association conference on a basketball arena and retail-and-housing debt and the secondary market. That complex in an arguably vibrant area of said, it’s the insiders like Fitch Ratings Prospect Heights, Brooklyn. Either managing director Roelof Slump and way, expect opposing ideas, perhaps WL Ross & Co. vice chairman James whispered, when Rose Associates Lockhart who will really illuminate the chairman Daniel Rose and Forest City European debt crises and how the Fed’s Ratner chief executive officer Bruce Ratner shifting policy choices will affect business in receive honors during the New York Building 2012. Last year’s expo corralled hundreds of mort- Congress’s 91st annual Leadership Awards luncheon. gage investors, investment bankers, lenders, regula- tors and chief executives to one of the industry’s New York Building Congress 91st anniversary premier secondary market events. But with the up- Leadership Awards luncheon; Hilton New York, coming presidential elections still lingering, expect 1335 Avenue of the Americas, 11:30 a.m. to 2 p.m. seminars like “The Government’s Role in Housing: Contact Janine Badalamenti at 212-481-9099 or Secondary Market Executives Update” to positively email her at [email protected] for more bustle this time around. information or to RSVP.

TMO.0512.CS3.TheSked.indd 31 4/19/12 3:08:19 PM Of Interest / May 2012 An index of all the people, places, addresses and companies mentioned in this issue

31 22 31 21 22

A D Ingber, Jonathan ...... 2 N Spengler, Richard . . 23. Ackman-Ziff . . . . . 28. DiMaggio, Joe . . . . 22. Institutional Asset Nataxis ...... 12. St . Patrick’s Day . . . 21. Management . . . . 12. Actovia ...... 2. Dime Savings Bank of New York Community Starwood Capital . . . 10. Investors Savings Alpert, Michael . . . 10. Williamsburgh . . . . 14. Bank ...... 8, 14 State Charter Bank Bank . . . . 2, 14, 21-23 Advisory Board . . . 18. Amalgamated Bank . . 12. Drebin, Russ . . . . . 5. New York Yankees . . 22. Iron Hound Stein, Joshua . . . 16,. 17 American University . 28. Durst Fetner . . . . 12. New York Giants . . . 23. Management . . . . . 5. Sternlicht, Barry . . . 10. Appel, Aaron . . . . . 8. Duval & Stachenfeld . . 5. Northmarq Capital . . 18. Ironstate Development .5 Stoeffers, Brian . . . . 5. Apple Bank . . . . . 14. NYU ...... 28. Storz, Brian . . . . . 8. Askenazy Acquisitions 10 E J Sukenik Segal Askenazy, Ben . . . . 10. Eastdil Secured ...... 5 O J .P . Morgan . . . 2,. 14, 16 & Graff ...... 10. Astoria Federal Eastern Consolidated . .8, Obama, Barack . . . . 4. Joel, Billy . . . . . 22. Sun Trust Robinson Savings Bank . . . . 14. 24-27 Oberfell, Brian . . . . 18. Johnson Capital . . . 18. Humphrey . . . . . 18. Economic Development One57 ...... 12. Corp ...... 10. B K O’Neill, Thomas . . . 18. T Banco Santander S A. . 12. Eldorado Bumper Ottomanelli, Cars ...... 6. Kennedy School T .J . Maxx ...... 5. Bank Leumi . . . . . 14. Michael ...... 18 Emmet, Marvin of Government . . . 31. TD Bank ...... 12. Bank of America . . 18,. 12 OUT NYC . . . . . 12. & Martin LLP . . . . 18. Knakal, Bob . . . . 24-27 Tessler Developments .10 Bar-Or, Tal . . . . . 18. Extell Development . . 12. KPMG ...... 21. Thompson, Jack . . . 18. Barclay’s Capital . . . 18. P Kriss, David . . . . . 10. Thor Equities . . . 6,. 8 Barnett, Pam . . . . 18. Penner, Ethan . . . . 18. Kriss & Feurstein . . . 10. Toll, Jacob ...... 8. Bartolo, Richard . . . 18. F People’s United Bank . 18. Fannie Mae . . . . . 5. Kunofsky, Glen . . . 18. Begala, Paul . . . . . 31. Pinsky, Seth . . . . . 10. Fitch Ratings . . . . 31. U Berkadia Commercial PNC ...... 4, 12 Flushing Savings L U .S . State Mortgage ...... 8. Prudential Douglas Bank ...... 14. Ladder Capital . . . . 18. Department . . . . . 31. Betesh, Morris . . . . 6. Elliman ...... 12. Forest City Ratner . . 31. Lawsky, Benjamin . . 18. U .S . Supreme Court . . 4. Brookfield ...... 5. Prudential Mortgage Freddie Mac . . . . 8, 16 Lehman Brothers . . . 18. Brooklyn Federal . . . 22. Capital Co . . . . . 5, 12 Freel, James . . . . 12. Lieberman, Lipa . . . 8. V Build NYC . . . . . 10. Lockhart, James . . . 31. R Valley National Bank . . .6 G Lowenfeld, David . . . 31. Ranieri Partners . . . 18. Verrone, Robert, 5 C Gandell, Ryan . . . . 18. Lyons, John . . . . . 4. Von Der Ahe, Peter . . 18. Campbell, Stewart . . . 8. Ratner, Bruce . . . . 31. Gertenlauer, Jenna . . 18. Capital America . . . 18. Ray, Jordan . . . . 2, 28 Ghadamian, Daniel . . 5. M W Capital One . . . . 2, 14 Reagan, Ronald . . . 31. Glanzman, Andy . . . 18. M&T Bank . . . . .2, 14 Wells Fargo . . . 4,. 5, 12 Capstone Equities . . . 5. Related Companies . . 12. Glenwood Marcus & Millichap . 4, 18 Westfield Group . . . 10. Carlson, Tucker . . . 31. Rockrose ...... 12. Management . . . . 12. Martocci, Gino . . . 12. Whipple, Bruce . . . 18. Carlyle Group . . . . 5. Rose Associates . . 12,. 31 Goldman Sachs . . . 31. Massey Knakal . . . 6, 18 Wiener, Alan . . . . 4,. 5 Cayuga Capital Rose, Daniel . . . . 31. Gotham Organization . 5. Mazzei, Michael . . . 18. WL Ross & Co . . . . 31. Management . . . . . 8. Rovt, Alex ...... 5. Graff, Joshua . . . . 10. MetLife ...... World Wide CBRE Capital 5, 8 Rudin Management . . 12. Gross, Harry . . . . 12. Holdings ...... 31. Markets ...... 4,. 5 Meridian Capital Rutgers ...... 22. Grossman, Seth . . . . Group ...... CBRE Capital 18 4, 5, 6, 8, 18 Partners ...... 18. Guggenheim, Greta . . . 18 Merrill Lynch . . . 18,. 12 S Z Michaels, Howard . . . . Zamir, Josh . . . . . 5. Chandan, Sam . . . . 16. 5 Sam Chandan CIT Real Estate H Middlebury College . . 22. Economics . . . . . 17. Finance ...... 12. Harvard ...... 31. Minskoff, Edward . . 12. Sandler O’Neill # Citi Habitats . . . . 12. Hauspurg, Peter . . 24,. 26 Mission Capital + Partners . . . . . 18. 1 West Street . . . . . 8. Clinton, William . . . 31. HFF ...... 4. Advisors . . . . 2,. 10, 28 Savills USA . . . . 2,. 4 14 Wall Street ...... 2, 5 CNN . . 31 HSBC ...... 12. Moinian Group . . . . 8. Scavone, Frank . . . 18. 51 Astor Place . . . . 12. Cohen, David . . . . . 6. Mooney, Sean . . . . 18. Schechtman, 66 Leonard Street . . . 8. Cohen, Jason . . . . 28. I Mortgage Bankers David . . . . . 8, 24-27 76 North 4th Street Association . . . . 4, 31 Coughlin, Tom . . . . 23. ICSC ...... 10 Shorenstein . . . . . 5. 210 West 18th Street . 28. Mundane Funds, The . 18. Credit Suisse . . . . 31. Industry City . . . . . 8. Signature Bank . . . 14. 660 Madison Avenue . 10. Cummings, Informational Management Slump, Roelof . . . . 31. 1401 Hudson Street . . 5. Kevin . . . . . 2,. 20-23 Network ...... 31. Sovereign Bank . . . . 8.

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